£9k to invest - advice needed

adonis10

I've got £9k to invest/put into a decent savings account and am looking for a little advice.

At the moment I am thinking about using my remaining cash ISA allowance (£3,500) and then putting the other £5,500 into a short term savings account, which will give me time to investigate other options such as a stocks and shares ISA. I understand that I'll be getting less than 3% on the 5.5k, but I don't really want to lock it down for a year as I may decide to put 5k into a stocks and shares ISA.

I'm not really sure what type of investment I'm looking for to be honest. I'd be happy to go for a longer term view, ie stocks and shares, but I'm also at the stage in my life where I may need a few grand for a deposit on a property in the next few years.

Any advice appreciated.

ray123

If you open a Lloyds Vantage account, this will pay 4% interest on a balance between 5-7k. Although it is a current account, a lot of people use it as a savings account. Here is the link:
http://www.lloydstsb.com/current_accounts/classic_and_classic_plus_accounts.asp
You could deposit the other 2k in a instant access savings account such as Egg or The AA, or in an ISA.
http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#easy

I would not advise investing in a stocks and shares ISA.

adonis10

ray123 wrote: »

If you open a Lloyds Vantage account, this will pay 4% interest on a balance between 5-7k. Although it is a current account, a lot of people use it as a savings account. Here is the link:

You could deposit the other 2k in a instant access savings account such as Egg or The AA, or in an ISA.

I would not advise investing in a stocks and shares ISA.

Thanks, will look into it.

Out of interest, why would you not advise stocks and shares isa?

Ifts

adonis10 wrote: »

Out of interest, why would you not advise stocks and shares isa?

One reason might be because you put this in your original post:

I'm also at the stage in my life where I may need a few grand for a deposit on a property in the next few years.

If you need the money for a deposit in a few years time, you may be at risk of having to cash it in when you are showing losses. Stock market investment is usually viewed as a long term investment, 5+ years.

grubby23

ray123 wrote: »

If you open a Lloyds Vantage account, this will pay 4% interest on a balance between 5-7k. Although it is a current account, a lot of people use it as a savings account. Here is the link:
http://www.lloydstsb.com/current_accounts/classic_and_classic_plus_accounts.asp

But then you need to pay in £1000 a month to get this rate, ie., the 4%.

what about the NS&I, with the VAT up 2.5% in January this could yield a nice return next year...

daleuk_3

grubby23 wrote: »

But then you need to pay in £1000 a month to get this rate, ie., the 4%.

what about the NS&I, with the VAT up 2.5% in January this could yield a nice return next year...

How will the VAT rate increase effect this in a positive way?

grubby23

daleuk wrote: »

How will the VAT rate increase effect this in a positive way?

Higher inflation = higher return since you get RPI + 0.85%

adonis10

Thanks for the advice.

I may think about index linked savings certificate for part of the cash, maybe not all as I may want access to it in the next year or two. Maybe 3,000 here, 3,500 isa and 2,500 ????.

grubby23

adonis10 wrote: »

Thanks for the advice.

I may think about index linked savings certificate for part of the cash, maybe not all as I may want access to it in the next year or two. Maybe 3,000 here, 3,500 isa and 2,500 ????.

I have exactly the same question to answer as you, have around 10k and not sure what to do with the them. As I do not have any ISA, probably it makes sense to put some money into those ones first, and with the rest I could possibly risk the index link certificate. Or has anyone some better suggestions? Santander would have a nice savings rate of 3.2, but unfortunately I am not a customer...

Primrose

If you think you're going to need the whole sum within 2 or 3 years for a house deposit I certainly don't think you should be looking at any kind of equity ISA where general advice is that you should be prepared to remain in the market for a minimum of 5 years because of its volatility and the fact that you could lose money if you need to cash it in at the wrong moment. Certainly with the economy in its current state, it would be a brave person who invested their savings in equities if it's needed for a house deposit.
Apart from using your cash ISA allowance, I'd go for the best instant access or 1 year fix you can find and then transfer your 1 year fix to another ISA when it matures. The other way of getting a good interest rate, if you're able to save money regularly, is to opt for a 1 year regular saver account, and then cash ISA it when it matures.

Martin_the_IFA

Don't forget Premium Bonds through NS&I. Interest rates are low so you would sacrifice a low amount of interest to potentially win anything from £25 to £1million every month. And if you don't win you can get your money back at any time.